AMAZING post by Joyce Lee, it is very worrisome the issue around insulin affordability.
“There is a growing recognition that we are reaching a crisis in the US diabetes community with regard to the price of insulin. If you search for “insulins” on GoodRx.com you will see a huge range of prices for different types of insulin. The insulins that I have traditionally used for my patients with type 1 diabetes include short acting analogue insulins like Humalog ($549) or Novolog ($551), and long acting insulins like Lantus ($274), Levemir ($436), and the new generic/“follow-on” long acting insulins like Basaglar ($234).”
“The rise of the pharmacy benefit manager, which is an entity that negotiates rebates with pharmaceutical companies, taking a proportion of the drug cost as profit without any sort of price transparency.”
This is the primary upward force in the list price of drugs. Nobody pays the list price, unless they don’t have insurance or are paying out of deductible. They are for practical purposes fake numbers. The vast vast majority of insulin purchased in this country actually receives a massive rebate to the patients insurance after the list price is paid. These rebates are where the negotiation and competition exists, and to the pharma company willing to offer the biggest rebate goes the contract award—- this has the very obvious effect of driving the prices upward indefinitely. Think about it. If I’m selling a car for $10,000, but now I have to collect the money with my right hand and hand back a $5,000 rebate with my left hand, the new price of the car becomes $15,000. If 30 different people are negotiating that rebate up and up indefinitely but the value of the product remains the same, what do we expect to happen to the “price” ?
The other issue is that we as consumers, due to the insurance market, don’t respond to supply and demand. NPH and R are available at Walmart for $25 but how many of us buy and use it? Hardly any… even if we accept that it’s not as good, shouldn’t more and more people use it as the price of other insulins continue to rise? To not would defy economics, which is exactly what we see happening.
Since people generally value their health more than their wealth, the ordinary rules of supply and demand don’t operate with respect to healthcare, which is one of the many reasons why a public healthcare system makes sense. If it were the entire American public, acting in unison under their federal government, which were negotiating with the drug companies over the price of insulin which they would be allowed to charge, then those companies would not get away with the abuses they have the power to impose on much less powerful insurance companies, hospitals, and consumers. Governments have considerable power to regulate health under the fifth and fourteenth amendment jurisprudence, so even imposing maximum allowable prices on drug companies for a vital medicine like insulin would be possible.
For once I agree with you. Government regulation of healthcare leads to much fairer results and more patient choice. I’ve never heard of insurance companies forcing patients to use one brand of insulin or test strips over another in Canada. There is no reason why they would since they are all the same price for everyone. I’ve also never heard of anyone having to use Regular or NPH because they can’t afford modern insulins, since the prices aren’t much different.
I am not a fan of price fixing. Sure the drug industry should be forced to sell their products at a reasonable price but who sets a reasonable price that still allows for innovation in the drug market, the government. That thought scares the heck out of me.
I believe the free market can work here if you level the playing field. Force the drug companies to set one fair base price and charge it to everyone. Further level the playing field by mandating that the base price cannot be higher in the US than in other countries. If they can sell for less in other countries and make a profit why can’t they make a profit in the US at the same price. The only additional cost that should be allowed would be for country specific cost.
In the 1970’s when Xerox machines were huge and expensive, the government did not allow Xerox to charge the gov more than the lowest price of any other customer.
We could get the same prices as Canada or GB or France . . .
As an outsider, though, I think most of the problems the US has with its healthcare costs are country-specific costs. The US spends on pharmaceutical advertising, on these pharmacy benefit manager people, on running massive profit-driven insurance companeis. This is all infrastructure that does not exist (or exists to a very limited degree) in other countries, and I’m sure adds billions to the cost of running the healthcare system that has to come from somewhere.
You are probably right to some extent, our health care system is badly broken but I can’t believe that there is a quadruple of cost. There is greed here pure and simple and it is allowed to happen.
One of the biggest problems mentioned in discussions is pharmacy benefit management companies, middle men between the drug companies and insurance companies. They take piece of the pie when they supposedly save money for insurance companies. They may save their customers (the insurance companies) money but in the process they end up inflating the cost for those with poor or no insurance.
By forcing drug companies to sell at the same cost to everyone you would remove these PBM companies from the equation and force transparency. Does anyone really know what their insurance company is paying for drugs on your behalf.
I know that you are in Canada and I don’t resent the deal that Canadians have. I just want the same deal.
Rather off topic but definitely a related response and certainly worth looking into for some diabetics. I need Novolin 30/70. Though certainly more affordable than other insulins, it’s still too expensive at $125 for someone who doesn’t have insurance. However, Walmart has purchased stocks or partnership or something with the company and Im able to purchase it there for $25.
Considering that over the past couple years (or so) Lilly and Sanofi used that R&D money to release biosimilars of each others’ “flagship” insulin products (Lilly’s Basalgar to compete with Lantus and Sanofi’s Admelog to compete with Humalog), I think the claim for “innovation money” is far less than convincing these days…
The biggest advancement for diabetes in the last 20 years hasn’t been by the pharmaceutical companies. It’s been by the medical technology companies (CGM). I’m using the same humalog that I started using in 1996/1997. The only difference is at that time as a college student with no pharmacy benefits I could go to the pharmacy and afford to by a bottle of humalog insulin.
In my opinion health in general is a top priority. As far as taxes are concerned, everyone should be healthy before anyone has a Lamborghini. Diabetes meds, cancer meds etc should all be available to all. There’s no such thing as free healthcare (besides volunteers), but putting into place a system in which all can be provided for is prudent. An insurance plan that everyone has regardless of whether they’re working or not. Why are all drivers and their cars insured, but not the lives of people? I have seen far too many people having to choose between medication and basic necessities.
No one should fall between the gaps; there should be no gaps.
You’re right that driving is a privilege, but health CARE is not. God gave it as a basic human right. The proof for this is that, when you see a person sick, doesn’t it bother your conscience not to do something to help them? Therefore it is right to care for a sick persons health…
We get busy and forget about them and so there ought to be a method by which this automatically happens even when we forget… Like a pension that is regularly and in easy increments set aside and stored up elsewhere
I was just pointing out depending how you view healthcare, why the auto insurance scenario might not be the best intellectual argument for healthcare. Nothing more.
You might want to edit your comment if the auto insurance model isn’t the model you agree with.
